The Pandora Papers Exposé: Hoarding wealth amidst global hunger and uncertainties
While the vast majority of people across the world are under the grip of hunger and economic insecurity, hundreds of politicians, business executives, royalties, celebrities, religious leaders, and even drug dealers were exposed to have been salting away their wealth in faraway offshore accounts. These individuals are counted among the super-rich, many of whom are set to meet with government leaders in Davos for the 52nd World Economic Forum this week.
Earlier this month, the International Consortium of Investigative Journalists (ICIJ) completed its releases of massive stores of data—2.9 terabyte of images, emails, and spreadsheets—of secret financial dealings of the global elite. Dubbed “the Pandora Papers,” the documents detailed transactions of money estimated to range from US$5.6 to US$32 trillion.
First published in October 2021, the Papers implicated individuals and companies from countries such as Cambodia, India, Malaysia, Pakistan, the Philippines, Qatar, South Korea, and the United Arab Emirates. Also included were individuals from Switzerland, Ukraine, the United Kingdom, as well as a former official of the International Monetary Fund and the Legionaries of Christ religious order.
Previously, the ICIJ released the Panama Papers1 in 2016, with 11.5 million confidential documents. A year later in 2017, it also leaked the Paradise Papers, which outed the likes of AIG (US-based leading global insurance company), Prince Charles, Queen Elizabeth II, the president of Colombia Juan Manuel Santos, and U.S. Secretary of Commerce Wilbur Ross.
In the Pandora Papers, the Philippine Center for Investigative Journalism (PCIJ) and Rappler listed more than 940 individuals and companies with Philippine addresses2. Some of the more recognizable names from the business sector include the Aboitiz family, the Sy siblings, Helen Dee, Rolando Gapud, and Enrique Razon Jr. Government officials or individuals with links to government mentioned in the Papers include Transport Secretary Arthur Tugade, Dennis Uy, and Senator Sherwin Gatchalian and his family.
The Aboitiz family owns the Aboitiz Group, with interests in banking, real estate and infrastructure, and power generation—the Aboitiz Power Corp., a Philippine listed company that operates several coal-powered plants.
The Sy siblings, owners of the SM Group conglomerate, are listed in Forbes 2021 as the richest Filipinos with a combined worth of $16.6 billion. In 2016, the group denied allegations that it had been practicing endo (contractualization). But In the same year, an inspection of the Department of Labor and Employment in SM stores in Metro Manila revealed that only 34,210 out of the company’s 67,248 employees had regular employment status. By keeping the bulk of its employees on a contractual basis, the company is able to avoid complying with labor laws and core international labor standards, which guarantee certain benefits for regular workers.3
Of Dictators and Dirty Energy: Knotted Ties Unraveled
Helen Dee is the chairperson of Rizal Commercial Banking Corporation (RCBC). The bank was used by cyber criminals to steal $81 million from the Bangladesh Bank in February 2016.4 The bank has been financing investments in coal power plants, but in December 2020, it announced that it will no longer finance new coal power projects.
Rolando Gapud served as financial adviser for the family of the former dictator Ferdinand E. Marcos. The illegally-amassed wealth of Marcos has been a subject of numerous court litigations. As a respondent in several cases filed by the Philippine Commission on Good Governance (PCGG), Gapud later agreed to help identify some of the ill-gotten wealth,5 portions of which were eventually recovered.
Although ousted by a popular revolt in 1986, the Philippine government is far from recovering fully the Marcos family’s stolen fortune, which is deftly hidden through a web of cronies, like Gapud. Imelda, the family’s flamboyant matriarch, was convicted by the Sandiganbayan,6 the country’s graft court, for seven counts of corruption in 2018 while serving as a lawmaker for her husband’s hometown. Today, prospects of recovering the Marcoses’ ill-gotten wealth are bleak, as Ferdinand “Bongbong” Marcos Jr. is poised to take over the Philippine presidency after highly-contested elections7.
Way back in 2013, the ICIJ reported that Imee Marcos, the eldest progeny of Marcos, is one of the beneficiaries of the Sintra Trust,8 created in June 2002 in the British Virgin Islands. Documents show that Imee was a financial advisor for the Sintra Trust, including a company in which the Sintra Trust was a beneficial shareholder, ComCentre Corporation. The documents also mentioned a bank account in the Sinagapore-based United Overseas Bank Limited.
The Pandora Papers also mentioned Dennis Uy, a Davao-based businessman engaged in shipping and logistics, gas distribution, telecommunications and other industries. He is known to have donated P30 million to Rodrigo Duterte’s presidential campaign. He was later appointed presidential adviser for sports, and has been an honorary consul to Kazakhstan since 2011.
Uy was embroiled in a business controversy in 2021 with the Makati Business Club, after his company, Udenna Corporation, acquired 90 percent of the Malampaya offshore gas field. Malampaya9 is supplying five power plants in Luzon, the country’s largest island. In the recently concluded Philippine elections, Uy’s logistics firm signed a Php 500 billion contract with the Commission on Elections to transport electoral ballots and vote counting machines, a significant number of which were defective on the day of the election10. As Uy is widely identified to be within the administration’s key elite circles, the granting of the bid to his logistic firm has been under fire.
Tugade and his children appear in the Trident Trust records as owners of Solart Holdings Limited, a British Virgin Island company. In the same Papers, members of the Gatchalian family are mentioned in nine offshore companies.
Earlier in 2013, Manny Villar who is the second richest Filipino11, was reported by the PCIJ to have been maintaining offshore accounts. Villar’s wife, Cynthia, chairs three Senate committees in the current 18th Congress—agrarian reform, environment, and agriculture and food. The Villars own vast tract of land under their real estate business12, and it so happened that Cynthia’s committees have oversight in government land-related programs and developments.
Along with the Villars, Jinggoy Estrada who is Senator-elect in 2022 under the Ferdinand Marcos Jr. and Sara Duterte ticket was also reported to have offshore accounts. Jinggoy and his father, former president Joseph Estrada were both convicted and jailed for corruption raps. The older Estrada was later pardoned by another former president, Gloria Macapagal-Arroyo, who herself was convicted by a lower court in a plunder case but was cleared by the Supreme Court in July 2016, weeks after a close ally, Rodrigo Duterte, was elected president.
The Asian Connection
The inclusion of individuals from the Philippines in the Pandora Papers is hardly surprising, as elites from at least a dozen Asian countries have also been revealed to maintain offshore accounts. Two of the financial services providers mentioned in the Papers, Asiaciti Trust and Il Shin, are based in the financial centers of Singapore and Hong Kong, respectively.
The Indian Express reported13 more than 300 Indians with offshore accounts, including two former officials of the Indian Revenue Service, and a score of Bollywood celebrities, sports stars, business persons, and even individuals accused of fraud and other financial crimes.
The Pandora Papers14 also revealed that financial backers, officials and family members close to Pakistan’s Prime Minister Imran Khan to be owning concealed companies and trusts holdings, with several military leaders being involved. In Sri Lanka, former deputy minister Nirupama Rajapaksa15 and her husband used shell companies and trusts to hide some $18 million in assets, while Nepal’s lone billionaire, Binod Chaudhary, a politician and retail and manufacturing magnate, owns shares in three offshore shell companies.
The Center for Investigative Journalism (CIJ) Nepal16 reported offshore dealings of the Malaysian billionaire founder of Top Glove, a giant rubber glove maker which hugely profited from the COVID-19 pandemic. The company was accused of employee abuses, including forced labor, with workers mostly coming from low-income countries.
In Malaysia, the Malaysiakini17 investigated the role of Singapore in the global offshore financial system. They reported that while the island city-state does not have attractive tax and asset protection comparable to other offshore financial centers, it offers specialized financial services, such as creating and managing shell companies and trusts in overseas jurisdictions.
In Thailand, the Isra News18 reported that Chitpas Kridakorn, a parliament member and heiress of the Singha beer empire, was a potential beneficiary of a trust that owned luxury properties in the United Kingdom, based on a 2017 transactions, although it was not ascertained whether the transfer was finalized.
The Tempo magazine on the other hand, reported that two top Indonesian officials are linked 19 to several offshore companies. Coordinating Minister for the Economy Airlangga Hartarto reportedly owned two companies registered in the British Virgin Islands, but he denied any connections. The report also said that Coordinating Minister for Maritime Affairs and Investment Luhut Binsar Pandjaitan was a director of a Panama-based oil company.
One glaring reality in the Pandora Papers involving individuals in Asia —many of those implicated have close links to government officials, if not former or current government officials themselves. Business and governance are intimately linked. This makes future actions and lobby efforts for transparency and accountability more difficult.
“The legality is the true scandal”
While some of the transactions can be legitimate investments, the intention to hide it from the country of origin by account owners is clear and could be inferred as an attempt to avoid tax obligations, conceal ill-gotten wealth, or worst, launder money acquired from criminal activities.
In October last year, activist and science-fiction author Cory Doctorow20 tweeted that offshore dealings of the super elite’s being legal is the true scandal. “Each of these arrangements represents a risible fiction: a shell company is a business, a business is a person, that person resides in a file-drawer in the desk of a bank official on some distant treasure island,”he said.
Doctorow was commenting on what the Pandora Papers revealed—the intensive use of shell companies which are mostly inactive, maintained for future and various financial arrangements. These shell companies are registered in an OFC (Offshore Financial Center), a territory or country that provides foreign companies with business and financial services. Some of the well-known OFCs include the British Virgin Islands, Bahamas, Bermuda, Cayman Islands, the Isle of Man, Seychelles, Hong Kong, and even Switzerland. Some of the documents obtained in the Papers were also in trusts set up in the US, such as South Dakota and Florida.
The ‘offshore’ system is nothing new—it originated in the 1960s, with the creation of the Eurobond21: a financial investment instrument allowing owners to move their wealth covertly across jurisdictions, while evading taxes altogether, or at the very least, avoid payment of higher rates of interest.
In the 1960s, the European middle-class had difficulty finding low-risk places to put their savings and earn safe returns. Regulation Q, formulated in 1933 under the US Glass-Steagall Act,22 discouraged Europeans from putting up deposit accounts because the law limits interest rates paid on deposits in checking accounts. Added to this, the US’s Interest Equalization Tax of 1963, which carried 15 percent tax on the price of a bond purchased, decreased the capital account outflows, increasing investment in the US. Eventually, it choked the flow of dollars into Europe; inhibiting companies from funding their projects. The Eurobond23 was the workaround, and it served later as the prototype for other money market funds.
Today, it is the super-rich that is handsomely benefitting from the outcome of the Eurobond and its underlying needs that birthed the offshore system. The financial market in which offshore banking is just one limb, has now mutated into a beast, siphoning off every wealth created anywhere in the planet.
Considering that a huge percentage of this stashed-away wealth were generated at the expense of the working people through slave-like conditions and unlivable wages, not to mention the rapacious exploitation of the environment which threatens the global ecological balance, offshore banking takes on a whole new meaning.
A study by Daniel Reck24, an assistant professor from the London School of Economics and Politics published in 2021, states that tax evasion schemes by the super-rich are becoming sophisticated” and that even expert auditors are now having difficulty locating offshore accounts, with the top one percent richest benefitting.
One problem is in the privacy and protection these OFCs provide—privacy rights which shield individuals from declaring their assets and accounts. The grey area lies in this point of nondisclosure, when it becomes next to impossible to differentiate tax minimization from evasion or outright fraud.
Reck and his colleagues at Carnegie Mellon University and the University of California said that the top one percent of American earners fail to report about 21 percent of their incomes to the Internal Revenue Service (IRS), significantly more than was previously known. “These super–high-income taxpayers, who have so much to gain from successfully evading their taxes, are much more sophisticated at evasion than the other 99 per cent of earners,” the researchers said25.
The 2021 report by the United Nations High-Level Panel on Financial Accountability, Transparency and Integrity Panel (UN FACTI),26 has identified that large portions of revenue that could be used by governments to benefit their own peoples are being lost in an elaborate scheme of tax avoidance and evasion. The UN FACTI Panel report stressed the importance of a global mechanism for public registries of beneficial ownership to curb these abusive practices.
With legal loopholes that can be exploited to actually evade taxes, the legality of offshore banking is no longer a non exitus. Or perhaps, that tax avoidance through storing wealth in offshore accounts is even legal in the first place is the main issue, and nothing but short of scandlous.
Initial impacts of the Pandora expose
In 2016, the Panama Papers ignited protests that led to authorities launching hundreds of tax probes and criminal investigations. Iceland’s prime minister eventually resigned, and a Ukrainian politician called for the impeachment of their president. Last year, a Bollywood actress was questioned for six hours by Indian authorities on her inclusion in the Papers.
In Malta, Keith Schembri, former Prime Minister Joseph Muscat’s chief of staff, was charged with money laundering and fraud, while in Denmark, the country’s tax minister cited the Panama Papers to justify hiring hundreds of new employees to bolster the fight against tax fraud.
In the U.S the Panama Papers was instrumental in pushing for the enactment of the Stop Tax Haven Abuse Act and the For the People Act.
The Philippines, however, has yet to catch up with the growing clamor to investigate offshore banking and tax avoidance. The exposé on the offshore account of Jinggoy Estrada in 2013 for instance, did not result in tax fraud investigations, despite his being convicted with corruption. The government is still struggling to enforce tax laws in its own jurisdiction particularly against the wealthy individuals and multinational corporations. Taxes from the ordinary working people however are automatically deducted from their paychecks, on top of burdens from heavily taxed products and services that they regularly consume.
According to tax expert Mon Abrea, corruption at the Bureau of Internal Revenues (BIR) is embedded in the system. A former BIR examiner and a prominent advocate for genuine tax reform in the country, Abrea said in 2018 that whatever the TRAIN law was can hope to collect will be wasted due to corruption. He cited a proposed bill on the creation of national revenue authority, where the current BIR examiners will be forced to retire, and only those who pass new stringent mechanism will be rehired27.
Currently, the BIR is unable to address issues of tax non-payment by big business and its relation to government corruption.
In 1993, the BIR filed a tax case against Lucio Tan, one of the country’s tycoons, for not paying P7.68 billion in ad valorem, income and value-added taxes in 1992. The BIR later filed two more cases, accusing Tan of tax non-payment amounting to P9.51 billion in 1990 and P8 billion in 1991. Tan was able to halt the proceeding proper for 12 years. In 2005, the cases finally held their first hearing, with the tax claims ballooning to P25 billion. But a year later in 2006, the Marikina Metropolitan Trial Court dismissed the tax case for lack of evidence.
In 2017, President Duterte announced that Lucio Tan owes the government at least P30 billion in taxes. A year after in 2018, he suddenly “cleared” the tycoon of past tax liabilities, saying he would “forever shut up” on the subject, after Tan as CEO of Philippine Airlines (PAL) offered additional plane to fly home repatriated OFWs from Kuwait, and after PAL’s payment of P6 billion in taxes in 2017.
But the best piece of evidence that tax law enforcement in the Philippines for the rich and powerful is different for the ordinary working Filipinos is the recent Commission on Election (COMELEC) decision to junk the disqualification case against presidential candidate Ferdinand “Bongbong” Marcos Jr. stemming from an earlier court indictment for estate tax non-payment. A portion of the COMELEC decision penned by the now controversial Commissioner Aimee Ferolino, read: “The failure to file tax returns is not inherently wrong in the absence of a law punishing it.”
In the case of the Lopez-owned media giant ABS-CBN’s franchise non-renewal,28 tax non-payment has taken a different role—political weapon against a private company seen as non-ally of the sitting government. The controversy has rendered 11,000 ABS-CBN workers jobless.
Layered benefits for the already rich
Offshore financial dealings have already demonstrated how the super-rich can safely tuck away their wealth from public scrutiny, dodge taxes and take away potential public revenues. It has been noted also that those who maintain offshore accounts are either super-rich individuals or government officials. With that in mind, it is now easy to imagine that any attempt to regulate the wealth creation and preservation of the rich can be swiftly dealt with by those who benefit from offshore banking in the government.
Philippine Finance Secretary Carlos Dominguez III for instance asserted that instituting a wealth tax carries the risk of capital flight.29 He did not say however that the super-rich do not need any reason to move their money as they see fit. This is in spite of the reality that in times of economic crises, the super-rich are the same group that benefit more from government interventions and incentives.
On March 26, 2021, the Philippine Congress enacted Republic Act (RA) 11534, otherwise known as the Corporate Recovery and Tax Incentives for Enterprises (CREATE), formerly known as TRABAHO bill, the second part of the TRAIN Law. Hailed as a COVID fiscal relief to domestic and foreign corporations doing business in the Philippines, it amended several provisions in the old Tax Code. It reduced corporate income tax from 30 percent to the current 25 percent, retroactive to July 1, 2020, and will be reduced further by 1 percent annually in the next six years, up to 20 percent by 2027.
Earlier in June 2020, economists from the country’s top universities issued a position paper opposing its passage. Former UP School of Economics (UPSE) Deans Raul V. Fabella and Ramon L. Clarete and Ateneo School of Government Dean Ronald Mendoza explained that the revenue loss the government will incur is far too great in a time when the need to increase the tax effort is critically important.
According to Fabella, the looming U-shaped recovery will diminish the possible gains of TRAIN law, whether the government will retain the 30 percent or enforce the new 25 percent corporate tax. Clarete for his part noted that during the Asian Financial Crisis and the succeeding Global Economic Crisis in 2007-2009, the country was forced to cut on corporate income taxes to encourage more firms to pay their taxes, but the revenues only improved after the economy finally recovered. He also said that it is only at the end of the Covid-19 crisis that investors can regain the confidence to invest30.
While Finance chief Dominguez claimed that CREATE will generate P42 billion in extra capital once the bill is enacted, and P625 billion over the next five years, economist JC Punongbayan said that it will not jumpstart the ailing economy.
According to Punongbayan the government should instead put money directly in the hands of workers through cash transfers, wage subsidies, or zero-interest loans. He also said that CREATE will favor big businesses, not the MSMEs that employ about 63 percent of the Filipino workforce and were hardest hit by the pandemic. The difference in tax savings, he said, would be in the billions for big business, but only a few thousands for the small business owners.
The assertions of the economists mentioned above in 2020 that CREATE will not result in a rebounding of investments proved to be correct. In November 2021,31 the Philippine Economic Zone Authority reported a 25 percent drop in investment pledges. In February 2022, the drop increased to 27 percent.
Labor groups for their part have called for vigorous government spending, particularly continued support for household’s expenses through cash transfers. The labor sector also proposed economic activities which will generate jobs and income for workers, such as the provision of public transport (through service contracting), provision of infrastructure useful in containing the pandemic and contact tracing. Aside from health, the government could have also augmented its spending in other sectors. Finally, the groups have proposed government stimulus in economic activities, by subsidizing costs of production and wages.
With not enough money to finance its needed economic interventions, the government resorted to borrowing. By the end of 2021, the country’s debt stood at P11.7 trillion, almost P2 trillion or 19.7 percent more than the P9.8 trillion recorded ending 2020. Domestic debt reached P8.17 trillion, 22 percent higher than 2020, while external debt grew 14.8 percent to P3.56 trillion. According to the Bureau of Treasury, the debt is “still within the accepted sustainable threshold as the economy continues to recover from the effects of the pandemic.”
But president Duterte and his economic managers allocated the borrowed money into something else. The 2021 budget indicated huge allocation to infrastructure projects with unestablished social benefits, instead of vaccines and healthcare needs. Whatever limited resources are allocated for public health intervention was compromised by the anomalous Pharmally transactions32. The government has also poured some P19.5 billion to its anti-insurgency program. Allocation for the poor, workers, and small businesses took the backseat.
Where lies our hope?
In Greek Mythology, Pandora inadvertently opened a box left to the care of her husband. Expecting to contain precious gifts, she quickly realized to her dismay that it contained illness, hardship, trouble and pain for humanity. In the end, however, she found out that there remained at the bottom of the box something that can compensate for or even undo the plagues: hope.
The Pandora Papers has exposed not only the growing divide between the haves and have nots. It also revealed that the world has become no more than a playground for the monied class.
A core function of any democratic society is the effective capacity of the government to tax excessive wealth to reduce inequality and disparities of political influence.
These revenues that can be recovered from recovering and taxing offshore wealth can be mobilized for infrastructure, hospitals, schools, and other essential public services necessary for inclusive and sustainable development.
Curbing illicit financial flows and tax avoidance is particularly urgent in Asia, where peoples continue to suffer from budget cuts in essential social services even as they experience multiple crises.. Making the rich pay their share is also particularly challenging in the region, as business interests are closely tied up with the interests of those in the government. If summits of the super-rich like the OECD and the WEF provide any indication, tax transparency and accountability efforts are facing an uphill battle ahead. But the long history of peoples’ struggles for justice and democratic movements in Asia are testament to the rich resources of hope that lie in our midst.
3Endo is a contraction of ‘end-of-term’ referring to companies’ practice of hiring workers for contractual work, of usually five months and sometimes, even less. It falls short of the required six months continuous work which under the Philippine labor law can be a basis for regular employment status. The practice effectively prevents workers from joining unions, denying them better benefits through collective bargaining. It also prevents workers from charting a better life as planning is difficult in an employment that ends in five months, and subjects them to an almost permanent state of insecurity. Ending endo was one of the unfulfilled political promises of the current president, Rodrigo Duterte. See: https://www.rappler.com/newsbreak/iq/201468-duterte-endo-contractualization-promise-2016-to-2018/
20 An advocate for liberalising copyright laws, co-founded the free software P2P company Opencola in 1999. Themes of his work include digital rights management, file sharing, and post-scarcity economics.
21 A debt instrument that's denominated in a currency other than the home currency of the country or market in which it is issued
22 Repealed in 1999
ADB's Asia Pacific Tax Hub a Trojan Horse
by Pooja Rangaprasad and Jeannie Manipon
April 6, 2022
Reprinted from Asia Times - https://asiatimes.com/2022/04/adbs-asia-pacific-tax-hub-a-trojan-horse/
The Asian Development Bank (ADB) launched the Asia Pacific Tax Hub on domestic resource mobilization and international tax cooperation in 2021. The stated objective under “international tax cooperation” is to promote tax initiatives of the Organization for Economic Cooperation and Development (OECD), a club of mostly high-income countries.
This explicit design and rationale of the Asia Pacific Tax Hub is extremely concerning considering the long history of criticism by developing countries, including in Asia, of OECD tax standards being biased and unfair.
Several Asian countries are not part of these OECD forums. For instance, the ADB notes that 26 of the 46 ADB developing members are not part of the OECD BEPS Inclusive Framework. (BEPS stands for “base erosion and profit shifting.”)
Asian civil-society organizations have criticized this ADB tax hub for being created without broad public consultation in the region and expressed concerns that it will reinforce the gross power imbalances in decision-making around global tax rules.
Rather than address the global constraints to domestic resource mobilization, the ADB tax hub will only reinforce the current problematic power dynamics in the international tax architecture dominated by OECD countries’ interests. It also raises important questions on how regional cooperation gets defined in Asia, and in whose interest.
Criticism of OECD tax standards
Developing countries have for years criticized OECD tax standards as biased and ineffective. During the recent negotiations of the OECD BEPS tax deal, the African Tax Administration Forum noted that Africa risked being “collateral damage” in the process.
Argentina’s finance minister has also complained that the BEPS deal is bad for developing countries, with their concerns largely ignored in the process and being forced to choose between “something bad and something worse.”
Pakistan, Sri Lanka, Nigeria and Kenya have already rejected this recent OECD tax deal. Pakistan’s finance minister said his country did not join the deal as it has “nothing for developing countries.”
Nigeria’s finance minister explained that many developing countries would experience reduced revenue collection by implementing the OECD deal.
A recent United Nations report noted that the 2021 tax deal of the OECD Inclusive Framework would only benefit a small number of developed countries and that developing countries stand to lose out.
Civil-society organizations globally are calling on developing countries to reject this tax deal and not sign on to any OECD multilateral, legally binding agreements that will implement these decisions.
Currently, it is only a political statement and not a binding agreement. The question arises as to why the ADB is promoting such OECD decisions, and in whose interest.
The Group of 77 and China (a grouping of more than 130 developing countries in the UN) have instead been calling for a universal, intergovernmental negotiation process at the United Nations to address the international tax system where all developing countries can participate on equal footing.
However, OECD countries continue to block that call in the United Nations and instead are now finding “regional” entry points to promote these decisions with developing countries.
Redefining ‘regional cooperation’
The recent G20 Finance Ministers and Central Bank Governors Meeting communiqué mandated the OECD to identify areas where domestic resource mobilization efforts can be supported in the Asia-Pacific region in collaboration with the ADB Asia Tax Hub as a “top priority.”
It is deeply problematic that bodies such as the Group of Twenty and OECD are dictating regional priorities despite having no mandate from Asia-Pacific countries that are not members of G20 and OECD to do so.
This is further compounded by the fact that membership of some of these Asia-Pacific bodies already includes non-regional members. Of the ADB’s 68 members, 19 are outside of Asia and the Pacific. Similarly, the UN Economic and Social Commission for Asia and the Pacific (ESCAP) also includes members such as the US, the UK, France and the Netherlands.
For an issue as politically sensitive as taxation, the presence of non-regional members in such bodies risks undermining regional priorities, especially of developing countries in the region.
Indonesia as current G20 chair and India as the upcoming G20 chair should be upholding interests of developing countries in Asia instead of rubber-stamping the interests of OECD countries. Asian developing countries should reject this international tax cooperation agenda of the ADB tax hub, which is nothing more than a Trojan horse to promote biased OECD tax initiatives in the region.
APMDD members in India poised to launch campaigns calling for tax and fiscal policies that benefit women and children
APMDD members in India poised to launch campaigns calling for tax and fiscal policies that benefit women and children
Members of the Asian Peoples’ Movement on Debt and Development in India are set to launch campaigns to call for increased government subsidies for health care, press for a portion of taxes to be used for the welfare of women and children, and demand fewer taxes on fishing gear. They will also launch a social media campaign against the rise in fuel prices and LPG.
These tax and fiscal justice campaign plans were discussed on March 30, 2022, in a country consultation on tax and fiscal justice in New Delhi, India organized by the Asian Peoples' Movement on Debt and Development. Representatives of APMDD member organizations participated, including 30 leaders coming from the National Hawker Federation, Indian Social Action Forum, All India Women Hawker Federation, Samata, Mines Minerals & People, and Environics Trust. There were also some attending online.
APMDD members and resource persons from the Centre for Budget and Governance Accountability (CBGA) tackled global, regional, and national tax policy developments and other related issues that impact inequalities. Participants also planned out key steps in advancing a national campaign for tax and fiscal justice.
Jeannie Manipon, APMDD’s Development Finance (DevFin) Program Manager, outlined critical regional and global trends in the tax policy landscape. She noted that even in the pre-pandemic situation, governments had been relying on indirect taxes such as VAT and GST in many countries in the region, including India, and on other regressive tax policies. This undermines the redistributive function of taxation, thus, public services end up being funded by the same people that were meant to benefit from them, according to research.
This flawed tax system and the long-standing inequalities both on the domestic and global fronts were revealed and exacerbated by the pandemic, feeding what Manipon referred to as, “the virus of inequalities within and among countries.” During the pandemic, big companies and wealthy individuals benefited from generous tax incentives from governments under the guise of economic recovery, even as they continued tax avoidance and evasion practices, and exploited loopholes in tax systems.
To counter this flawed global tax system, civil society organizations have pushed for progressive taxation and called for a UN Tax Convention, Manipon said. She stressed the need for civil society to muster its collective voice calling on governments to not sign away taxing rights under unfair tax deals, peddled by G7 and the OECD countries.
Manipon said civil society groups should seize global advocacy moments such as the G20 summit taking place in Indonesia in November this year, and in India next year, to advance the call for tax justice.
Looking at the Context in India: Key Issues in Tax and Fiscal Policy
Sarah Farooqui, CBGA Senior Policy Analyst, said that India has one of the lowest tax-to-GDP ratios in the world which is expected to decline next year. She said that the higher the tax-to-GDP ratio, the greater the fiscal space the country has to finance various public services.
“Historically, India has always been more dependent on indirect taxes,” she said. “During the pandemic, this trend has worsened.”
She said that the Indian government already imposes high taxes on fuels such as diesel and petrol, which ordinary citizens use on a daily basis.
Government policies reducing corporate tax rate in 2019, and increasing excise duty in 2020 have led to a decline in the total share of direct taxes to total revenues from 54.6% in 2019 to 46.6% in 2021.
Farooqui said regressive tax policies worsen gender inequalities as women tend to spend more on household items, the cost of which includes consumption taxes. “As the costs of living rise, the socio-economic conditions within patriarchal structures hit women even harder, as they have to choose unpaid care work over education, formal employment, and access to healthcare,” she said.
A People’s Manifesto: Tax the Rich, Not the Poor; Make Taxes Work for People and The Planet
Rey Abella, also from the DevFin program, gave an overview of APMDD’s tax and fiscal justice campaigns and the “Seven Demands” outlined in A People’s Manifesto: Tax the Rich, Not the Poor, Make Taxes Work for people and the Planet1. He said the People’s Assembly for Tax Justice held in October 2021 led to the consolidation of a comprehensive regional campaign agenda aimed at responding to emerging challenges.
“We really felt the effects of inadequate funding of public services,” he said. It was also around this time that the OECD was pushing for their “tax deal of the rich,” lowering minimum corporate tax rates to 15%, among others. “This would result in decreased revenues for developing countries,” he said.
The OECD tax deal, undemocratically decided by the world’s richest countries, proposes a “two-pillar solution.” One pillar provides a tax arrangement benefitting only the Global North. It proposes for corporations to be taxed only in countries where sales and consumption are made and not in countries, such as India, where goods are produced through the extraction of natural resources and exploitation of cheap labor. The second pillar aims to lower the minimum global corporate tax rate down to 15%.
Key issues which surfaced in roundtable discussions that followed included the massive rise in fuel taxes over the last two years. The high fuel costs inevitably impacted the price of essential commodities burdening low and middle-income Indian households with a steady increase in their daily costs.
Adding to this are the impacts of the Goods & Services Tax system. Micro and small businesses are forced to spend additional money and effort to meet the additional paperwork and bureaucracy required by the GST system.
Essential fishing gear is now taxed under the GST system, affecting the livelihood of fish workers. Under the earlier tax regime, fishing gear was exempt from tax.
On top of this, the GST Council, the body that decides tax slabs, lacked transparency and proper representation of marginalized people in the country.
APMDD members also spoke about the controversial Metro construction in the city of Kochi. People in the entire state of Kerala are being taxed for the Metro despite the project only serving a small population, particularly in the city of Kerala.
APMDD holds forum on “Women’s Voices for Tax Justice: Women, Mining and Climate”
As part of the Global Days of Action for Tax Justice for Women’s Rights, APMDD and TAFJA held an online forum on 24 March 2022 to listen to women’s voices for tax justice and explore how mining and illicit financial flows impact on women’s rights and resilience in the face of an alarming climate crisis.
APMDD coordinator, Lidy Nacpil, called mining, climate, and illicit financial flows a ”triple whammy on women”. She said most of the countries of the South have extractivist economies as a legacy of the colonial past.
“The continuous extraction affects local communities where mines operate with pollution and extraction of resources during the course of mining… But certain types of extraction affect even far away communities. That is in the impact on climate, especially the continues extraction, production and consumption of fossil fuels which is responsible for 75 percent of global greenhouse emissions that has triggered and is escalating global warming and climate change.”
She emphasized that fighting for tax justice in extractives is not an easy fix. “Extraction has to be done in ways that economies will benefit but the environment is not destroyed. We need to stop the current tax incentives given to mining companies which encourage them. We need to punish, penalize, drive away these foreign mining companies, who do not only abuse countries’ environments, but their own workers,” she said.
“The climate crisis tells us we cannot take too long to take action. Policy changes are urgent. We need to work hard and fast,” Nacpil said, stressing the importance of women “who won’t stop at nothing to protect their children” in the fight.
Hoang Phuong Thao of Action Aid Vietnam noted the need to “unpack the reality of how inequality has increased significantly through the multiple crises that we have gone though in the past few years, and especially the crises of climate change and COVID -- and the reality that governments are trading off citizen’s rights for the benefit and profit of corporates."
“In the race to the bottom, ASEAN countries are trying to reduce corporate income tax to attract investments, with the hope that the trickle-down effect will turn into employment. But in fact our people -- especially our women, our women workers -- are suffering from loss of lands and livelihoods because of waters rising, suffering being pushed out of the labor market, becoming informal workers, becoming workers that have no protection,” she said.
Perspectives of women in mining-affected communities and gendered impacts of extractivist activities were discussed by Fara Diva Gamalo of the Freedom from Debt Coalition-Philippines and Srishty Anand of Oxfam-India. Gamolo spoke of a community in Leyte province where hundreds of rice fields have been destroyed by Chinese mining company, extracting black sand and shipping it out to China, since 2010. “Not only livelihoods have been destroyed, but also fresh water sources are depleting because of the mining,” she said.
Illicit financial flows in the extractives sector and impacts on women was discussed by Meliana Lumbantorua, a program manager of Published What You Pay Indonesia. “For Indonesia, tax is a dominant revenue source, but mining corporations have been using loopholes in tax laws for tax avoidance,” she said.
“The current crises have been especially hard on women. We have to push those ‘status quo-ists’, the financial profiteers and profit shifters, those who listen only to the rich, and those fossilized defenders of fossil fuels, to move towards cleaner, greener, more sustainable alternatives and system change,” said Vidya Dinker of the India Social Action Forum.
“We honor women who continue to lead the fight against mining and many fights for tax and gender justice, for climate justice. Women who, despite being marginalised from decision making in all spheres of life, including on financial matters, demand transparency, accountability and inclusiveness in financial systems, and are also in the frontlines of crafting transformative economic visions beyond extractivist economies,” Jeannie Manipon, APMDD Development Finance program manager, said at the conclusion of the forum.
See video of the forum here
SEA civil society groups resolve to advance advocacies for tax justice and the rights of workers, farmers, and women
SEA civil society groups resolve to advance advocacies for tax justice and the rights of workers, farmers, and women
Worsening inequality and climate impacts, unfair trade and global value chains, flawed tax systems and inadequate revenues to finance post-COVID recovery were tackled at a regional workshop organized by the Asian Peoples’ Movement on Debt and Development (APMDD) and Perkempulaan Prakarsa on 23-25 March 2022 in Bali, Indonesia. Participants from civil society groups in Southeast Asia resolved to strengthen their actions and collaborative campaigns for economic justice in the lead up to the G20 Summit slated to take place in November.
It was the first face-to-face civil society gathering convened by the APMDD and the Prakarsa under the banner of the Tax and Fiscal Justice-Asia (TAFJA) since the pandemic lockdowns in 2020. Close to 30 participants from Indonesia, Malaysia, the Philippines, Thailand, and Vietnam attended the workshop.
Ah Maftuchan, Prakarsa executive director, said that CSOs should seize various opportunities to continue the momentum of campaigning for economic justice. He noted that the Summit of the G20 or Group of 20 in November this year in Indonesia and in India in 2023 would be important advocacy moments. Prakarsa is in the leadership of Civil 20 (C20), a civil society platform to engage the G20 in political dialogue.
Lidy Nacpil, APMDD coordinator, said the current multiple crises that encompass health, food, financial, and climate crises challenge advocates to step up our campaigns for economic and climate justice. “The scale of relief needed, especially by those deeply affected economically, requires multi-government agencies to mobilize for the needs of people. Unfortunately, most proposals have not moved away from the usual ‘capital access’ and low-interest loans.”
Proposed solutions follow the current and flawed logic of the global economic system, Nacpil pointed out. “The major failure of this usual approach is that a bigger part of the wealth flows to richer northern countries, while the resources of poorer nations continue to be exploited… Recovery is being used by those exploiting the global system. What we need are genuine rebuilding and transformation,” she said. Nacpil cited the 15% minimum corporate tax proposed by the OECD in what they call the Two-Pillar Solution on Base Erosion and Profit Shifting” as an example of a false solution that does not benefit the peoples of the Global South. The OECD proposal is criticized by many CSOs as a ‘Tax Deal of the Rich’.
The workshop aimed to hone the campaigning skills of TAFJA members and other CSOs, and to contribute to shifting the discourse on tax incentives, ending the race to the bottom in tax competition, curbing tax avoidance and evasion, and strengthening the advocacy for increased resource allocation for social protection and public services especially for women.
Key Issues and Initiatives: Mapping Out Realities on the Ground
Through country presentations and mapping exercises, the participants shared about current initiatives and surfaced priority issues for campaigning.
Dinda Nuur Anisaa Yura of Solidaritas Perempuan (Women's Solidarity of Human Rights) in Indonesia spoke of human rights concerns arising from ill-advised projects that have resulted in environmental degradation. An example given by Yura is the Poso Hydro Power that early this year had announced support for the government’s effort for green energy. But, while the energy output is ‘clean’, the infrastructure construction has submerged farmlands which resulted in crop failures, endemic fish loss, loss of farmlands and food resources; and possible loss of cultural heritage.
Elaborating on the gender dimensions and layered impacts of the issue, she said that environmental degradation and the potential for disaster adds to the burdens of women who have to care for family needs and manage natural resources at the community level.
Mugheelan Sellathoray of the Monitoring Sustainability of Globalisation (MSN) in Malaysia spoke of the COVID lockdowns and the hardships suffered by frontliners, agriculture workers, migrant workers and those who lost their jobs. Meanwhile, there are families who are not getting subsidies for online education or any assistance when family members contract COVID-19. He said the political instability in the country added to the tensions as partisan politics slowed the provision of social protection measures.
Maricon Jesusco spoke about the Oriang women’s movement in the Philippines and its work on fighting inequality and women’s oppression. Oriang has led nationally coordinated actions to campaign for debt cancellation, tax justice, climate justice, and human rights. Reflecting on Oriang’s work in the province worst-hit by the 2013 Super Typhoon Haiyan, the strongest typhoon on record, she said that affected communities have not fully recovered and that rehabilitation assistance have mostly been extended to the business sector, not to the most vulnerable sectors.
Movements in the Philippines have also been involved in legislative advocacy. Vicente Barlos of the progressive coalition Sanlakas spoke about their push for the repeal of a martial law-era law that provides automatic appropriations for debt payments in the national budget. Another priority for Sanlakas is advocating for pro-worker reforms in the rules and regulations that govern recruitment and placement of industry workers by private employment. Sanlakas is also pushing for the adoption of a wealth tax, “buwis sa yaman, hindi sa kita” (tax on wealth, not just income).
Ha Thi Chu of ActionAid Vietnam (AAV) noted that among the key developments in the country are Vietnam’s commitments to stop building coal power plants and to zero emission by 2050. A new wage regime is also planned for the public sector, including the care sector by 2023. The situation of unpaid care workers is an important indicator to monitor gender equality progress until 2030, she said.
AAV, according to Ha Thi Chu, has several major advocacy actions and public campaigns for fair fiscal governance. AAV is advocating for the government to prioritize public welfare vs austerity measures, and for the Ministry of Finance to increase budget allocations for public health, prioritize the needs of people especially those in the informal workforce, and rebuild the economy. Vaccine equality and climate justice are also important advocacies. In all these advocacies, she said it’s important to bring the voices of peoples from the Global South, especially those excluded from negotiations like climate talks, to deliver a powerful message.
Pham Van Long of the Viet Nam Center for Economic and Strategic Studies spoke of ongoing research on the tax burdens of different sectors in Vietnam that will form the basis for the policy advocacy activities of the Vietnam Alliance of Tax Justice. He said the core of the current state budget revenue is value-added tax, accounting for 33.27% of total tax revenues. The business tax rate is stipulated by law to be 20 percent, lower than the 21.7% average tax rate for Southeast Asian countries in 2020. “The tax burden in Vietnam is excessive and reforms are required to promote growth,” he said, adding that Vietnam is the lowest income country among similar countries in the ASEAN, but its share of tax revenue/GDP is the highest.
Participants surfaced other priority issues during a facilitated mapping exercise. Topping the list are:
hunger across sectors, and increasing demand for social care and social protection; worsening inequalities, and continuing male dominance especially in the agriculture industry; labor and workers’ issues including low minimum wage and vulnerabilities of migrant workers;
inadequate domestic revenue to finance post-COVID recovery and need for alternative domestic revenues and fair tax-based solutions; debt trap of low and middle income countries and austerity conditions imposed; regressive taxation system; G20 proposed global minimum corporate tax; tax incentive competition; and
exploitation of natural resources and impacts of climate change; the need for transparency, accountability and participation in climate finance, and for just climate and energy transition.
Food, Agriculture, Trade, and Tax: Value Chains and Fiscal Policy
This panel discussion underscored the importance of analyzing global value chains, especially in food and agriculture, to see how these shape the economies of developing countries and impact on the situation of farmers and food producers. Resource persons of this session were Dati Fatimah (Indonesia), Thanh Nguyen Duc, Ph.D.(Viet Nam), and Wanun Permpibul (Thailand) with Herni Ramdlaningrum of Prakarsa moderating.
In Viet Nam, there has been a deliberate push for getting bigger shares in the global market for its agricultural products. Dr. Nguyen said that Vietnam emerged as a major coffee producer following a deliberate publicly-supported move into the sector with a focus on cultivating the flavourful Robusta beans. As a result, between 1980 and 2000, Vietnam went from producing 8,400 tons of coffee to producing 900,000 tons.
Wanun Permpibul said farmers in Thailand are now pushed to produce for the global market but for farmers rice is not a commodity but a livelihood. She shared that traditionally in Thailand rice is grown for consumption and only what is left is sold. The problem of the global rice value chain is that the “farmers, our food producers, are not properly recognized,” she said.
Dati Fatimah pointed out that economies are not engaged in the global value chain (GVC) on an equal footing.. She said countries differ in where they are located in the GVC with upstream countries, mostly from the Global North, possessing knowledge of the process and processing the raw materials and therefore benefiting more. Farmers downstream of the value chain, have no say in policies, she noted.
The discussion on food and agriculture continued in breakout groups. Participants discussed free trade impact upon local farmers (e.g. IPRs), sea pollution impact on fisher folks, farmers’ lack of access to production inputs, and the lack of acknowledgements of women’s role in food production.
For food security for the world, the group identified the adoption agriculture traditional system, the Subak system, a water management (irrigation) system for the paddy fields on Bali island, Indonesia. They also resolved to collect data on agriculture supply chains and to dialogue with MPs and government. Also suggested was the holding of a Southeast Asia farmers’ festival and joint campaigns with alliances to coincide with events like the UN Food System Summit or around the dates of the adoption anniversary of the anniversary of the United Nations Declaration on the Rights of Peasants and Other People Working in Rural Areas (UNDROP) or the UN Declaration on the Rights of Indigenous Peoples (UNDRIP).
Campaigning for Economic Justice
In campaigning for economic justice, issues in global economic governance and continuing power imbalances and asymmetrical relations need to be addressed. These are also reflected in current global tax rules and rule making. Jeannie Manipon, APMDD Development Finance program manager, asserted that “national tax systems in many parts of the world are legacies of our colonial history, and thus tilted towards serving the interest of the former Western colonial powers, multinational corporations, and local elites.”
She said the grave inequalities, within and among countries, and elite and gender biases must be addressed to overcome crises and build a sustainable people’s recovery. Manipon also presented a comprehensive tax justice advocacy and campaign agenda contained in the People’s Manifesto: Tax the Rich, Not the Poor! Make Taxes Work for People and Planet. The agenda and policy recommendations were hammered out by the APMDD through country consultations, joint actions and the People’s Assembly for Tax Justice held on 30 October 2021.
The People’s Manifesto puts forward seven demands for fundamental reforms to address flaws in tax systems, policies, and ‘rule-making’ that exacerbate inequalities. The first demand is to “Tax the Rich, Not the Poor”. Governments are being called to institute a progressive tax on wealth and accumulated assets of high net-worth individuals, and for countries around the world to establish cooperative mechanisms to strengthen the effective enforcement of wealth taxes by plugging loopholes that allow for illicit financial flows of untaxed wealth.
The second demand is to “Make Taxes Work for Women and Other Marginalized Sectors”. The demand requires that tax and fiscal systems address gender biases and discriminatory policies that deepen inequalities and reinforce economic and social exclusion. The five other demands are *Reclaim public services; increase and mobilize public funds for fulfilling peoples’ rights and needs!; *Make MNCs Pay Their Share! Stop Corporate Tax Abuses and Other Illicit Financial Flows (IFFs); *Advance Tax Justice in the Extractive Industry!; * End Inequalities in global tax rules and rule-making!; and, System Change, People First Before Profit!
The work of the Tax and Fiscal Justice-Asia was also discussed in this session by Becky Lozada, communications staff of APMDD Development Finance program. Formed in 2004, TAFJA is a regional alliance united in campaigning for greater transparency, democratic oversight and redistribution of wealth in national and global tax systems. It has working groups on tax and gender justice, on tax Justice in the extractives industry, on tax and ecommerce, among others.
Lozada spoke on the TAFJA position hammered against the “tax deal of the rich” proposed by the Group of Seven in June 2021 for a 15 percent global minimum corporate tax rate. She said TAFJA along with other tax justice groups has long called for at least 25 percent as a global minimum so that resources can be generated to tackle social-economic crises and to provide essential public services to people. “TAFJA has thrown its weight behind the call for democratic and transparent mechanisms to address the global dimensions of tax abuses. Part of the TAFJA press statement in June reads ‘with countries of the Global South most severely encumbered by foregone corporate tax revenues, we reiterate our call for a UN Tax Body towards more just and fair international tax rules,’” she said.
A breakout group on Inequalities and Economic Justice, looked into the lack of social protection for indigenous people, the situation of undocumented and informal workers, women’s lack of access to policy processes, development projects that impact negatively on women, climate change and energy, and free trade agreements.
They also discussed tax issues from the impact of taxes on rice prices and availability, VAT, and the need to enforce higher corporate taxes, and growing calls for a wealth tax like the windfall tax imposed by Malaysia.
The group recommended five points to raise these issues, especially before the G20, GCF Board Meeting, UNFCCC, Regional Comprehensive Economic Partnership (RCEP) processes:
-Involving women's participation during the decision making process for any project or program implemented in the community
-Empowering women to fight the difficult situation impacted by inequality economic policy by creating an economy creative SME independently
-Reducing retail tax (VAT) for consumers especially products mostly purchased by women and family goods, and increasing corporate tax to get distributed transparently for public facilities development and social protection program
-Ensuring the economic protection of women, including informal worker, by providing guaranteed access to availability of facilities, access to business permits for poor women.
-Stop the programs and projects that ignore human rights, prioritize projects that are environmentally sustainable, gender responsive and side with women.
Gender and marginalized communities
This session, in solidarity with the Global Days of Action on Tax Justice for Women’s Rights, featured Titi Soentoro of AKSI! and Hoang Phuong Thao of ActionAid Vietnam as resources persons with Aryanto Nugroho of Publish What You Pay Indonesia moderator.
Expounding on gender and economic justice, Soentero gave a feminist perspective in looking at the issues, especially policy measures to solve problems that miss the mark because of patriarchy. “Women are not in decision processes, whether in home or in governments,” she said, noting that this situation leads to bad decisions. An example given by Soentero is how in Java a geothermal project meant for “clean” energy resulted in trees being cut down and environmental destruction. “Women have had to walk farther to fetch water, because their traditional source of water was now controlled by the geothermal project,” she explained.
Thao emphasized the urgency of reclaiming public services as part of efforts to end inequality and poverty. She said tax and fiscal justice should go together but this will not happen under the mindset of the race to the bottom in corporate taxation aggressively being proposed by the G7-G20 and OECD.
A session on advocacies in Bali also focused on the situation of women. Nengah Budawati, of Women Crisis Center-LBH Bali gave a glimpse into the grim realities of women in Bali. She said they have to contend with violence , including sexual assaults, discrimination even from members of their families especially if they bear no son(s), and undervaluing and non-recognition of women’s work. Women are bullied when the land they till yields little harvest; men are known to leave their family when they have only daughters but still inherit everything. There are cases of sexual crimes committed by “male holy persons” that go unpunished.
“The Women Crisis Center-LBH led by Buda, as she is fondly called, ,provides shelter and training for women to run livelihoods, exclusively to help women, for “the victims to help other victims,” as they are “usually ignored by society,” she said.
Women’s Voices for Tax Justice: Women, Mining and Climate
As a contribution to the Global Days of Action for Tax Justice for Women’s Rights called by the Global Alliance for Tax Justice (GATJ), APMDD and TAFJA also held an online forum to listen to women’s voices for tax justice and explore how mining and illicit financial flows impact on women’s rights and resilience in the face of an alarming climate crisis.
Read more here.
Campaigning on Global Tax and other Finance and Development Issues
Dereje Alemayehu, executive coordinator of the Global Alliance on Tax Justice (GATJ), addressing the workshop remotely, emphasized the importance of pushing for inclusive processes that will allow the Global South, especially civil society, to truly have a say and be heard on financial policies. He pointed out that the G20 follows the lead of the G7, including in supporting the “Inclusive Framework” that pushed for the new minimum corporate tax rates that benefits corporations and the big economies rather than countries of the Global South.
He called on civil society to further put pressure on national governments to reject the tax deal of the rich. There is urgency to this issue because the OECD is now moving to put the legal and institutional arrangements for the “tax deal of the rich” in place, he said.
Another decision-making moment was the focus of the talk of Pooja Rangaprasad, policy director, Financing for Development, Society for International Development (SID). She called attention to the inputs of civil society groups for a fourth UN Summit on Financing for Development or g Monterrey+20 Summit. She said 2022 marks 20 years since the first International Conference on FfD was held in Monterrey, Mexico that resulted in a landmark international consensus to address key financial and related issues pertaining to global development which took place just as the world was reeling from economic recession. “Such a summit has never been more urgent again given the financing needs in the context of the COVID-19 pandemic, and future summits including the UN Social Summit in 2025 that will only succeed if urgent reforms of the global financial system are advanced. It is time for UN member states to convene the 4th FfD conference/Monterrey + 20 to agree a new global consensus on an economic,” Rangaprasad said.
The Consensus of the FfD in 2002 included the critical goals of eradicating poverty and promoting sustainable development to advance to a fully inclusive and equitable global economic system. The FfD included the consideration of an international debt workout mechanism and equitable international taxation policies.
Taxation of the digital economy and e-commerce remains one of the thorny issues in global tax policy debates, and where interests of countries in the global north and global south tend to collide. Tony Salvador of the Third World Network (TWN) explained that according to current global tax rules taxation of corporations is based on where they have physical presence or permanent establishment (tax treaty) but digital platforms do not need physical presence to do business in market jurisdictions. He said national governments should decide on how and what taxes are collected from digital corporations doing business in their jurisdictions. “This cannot be left to an international agreement as sought by the G7, G20, and the OECD. We need to push national legislatures to pass or maintain digital services taxes or otherwise tax foreign on eCommerce transactions.” Reforms are also needed in the international tax architecture, and the United Nations, according to Tony, is the proper venue to discuss international tax matters and called for support for the proposed UN Tax Convention.
The training workshop was a breakthrough face-to-face event for the organizers with many safeguards including various COVID tracking measures and tests for all participants to hurdle. It was held just a few days after C20 Indonesia staged the C20 Kick Off Ceremony & Meeting titled Listening to the World in Bali, in 7-9 March 2022.
Training participants came from Prakarsa, APMDD, TAFJA and network partners, including
∙ From Indonesia, participants came from
-Aksi! for Gender, Social, and Ecological Justice
-Publish What You Pay Indonesia
-Women Crisis Center - LBH
-Solidaritas Perempuan (SP)
-Transparency International Indonesia
-Association for Women's Small and Micro Business Assistance or ASPPUK
-Agrarian Reform Consortium (KPA)
∙ From Malaysia, the research based advocacy organization Monitoring Sustainability of Globalisation (MSN)
∙ From the Philippines, Oriang women’s movement and Sanlakas
∙ From Vietnam, ActionAid Viet Nam and the Viet Nam Center for Economic Studies and Strategic Studies (VESS)
Resource persons from Climate Watch Thailand and Indian Social Action Forum joined online sessions.
The training workshop is part of the activities of the Oxfam-supported project, “Fair for All: Improving economic-social justice through agriculture-value chains and fiscal policy reform.”
After the workshop, some participants sat down with groups in Indonesia, and with representatives from other countries also joining in via a Zoom link, in a meeting of the C20 Working Group that was opened up to workshop participants.
Facilitated by TAFJA’s Vidya Dinker and Prakarsa’s Herni Ramdlaningrum, those present were given an overview of the G20 by Ramdlaningrum. APMDD and Prakarsa committed to work together with the Working Group on Taxation and Sustainable Finance that has put on the table proposals for increased tax revenues to finance COVID-19 programs and climate mitigation under SDGs 2030 and Paris Agreement 2050; ecommerce taxation; and, ways to push for a more inclusive inter-governmental tax body,
The Working Group shared their concerns and discussions on the tax proposals from the G7 countries for global minimum corporate tax of 15% that does not effectively tackle profit shifting and tax dodging practices by multinational companies. The plans of the working group will be hammered out further and presented in various engagement opportunities up to the G20 Summit in October.
A briefing on a ground-breaking proposal for fair and inclusive global solution to economic crisis was provided by Tove Maria Ryding, tax justice coordinator of the European Network on Debt and Development (Eurodad). She spoke on a civil society proposal for a UN Tax Convention, launched on March 10, which aligns international tax governance to key global commitments and obligations, including human rights, equality, gender environmental protection and the Sustainable Development Goals. The United Nations is the forum that leads on these issues and, at the same time, it is the only truly universal body that exists. That makes the UN the obvious place to anchor a truly global convention on tax. Bringing the Convention in the United Nations would provide all countries equal footing in the discussions, she stressed.
The 17th G20 Heads of State and Government Summit will take place in November 2022 in Bali on the theme “Recover Together, Recover Stronger”. Formed in 1999, the Group of Twenty or G20 consists of the world's major established and emerging economies, the 19 countries -- Argentina, Australia, Brazil, Canada, China, Germany, France, India, Indonesia, Italy, Japan, Mexico, the Russian Federation, Saudi Arabia, South Africa, South Korea, Turkey, the UK, and the US -- and the European Union.